JAKARTA (TheInsiderStories) - Three foreign-owned enterprise operating in Indonesia considered will float their shares in an initial public offering (IPO) this year, said one senior official. President director of the Indonesian Stock Exchange (BEI), Tito Sulistio, said two companies are doing business in the mining sector while the other is in the property sector.
He admitted has spoken with PT Freeport Indonesia and PT Amman Mineral Nusa Tenggara (AMNT) on the plan. Previously the new president director of PT Freeport Indonesia Chappy Hakim proposed to divest 10 percent through IPO.
Currently, the Indonesian government owns only 9.36 percent of Freeport’s shares, a subsidiary of US-based Freeport-McMoRan Inc.Freeport have divested to the government a further 10.64 percent of its shares by Oct. 14, 2015 and must divest an additional 10 percent of its shares to the government by October 2019.
Chief Executive Officer of PT Medco Energi Internasional Tbk (MEDC), Roberto Lorado also revealed plans that will be released PT Amman Mineral Nusa Tenggara shares to public in this year. 82.2 percent of AMNT shares have been acquired by the company with worth US$2.6 billion from Newmont Mining Corporation Plc and Sumitomo Corporation.
The acquisition was completed in early November 2016. Medco acquired copper and gold mining area of 87 hectares located on the island of Sumbawa, West Nusa Tenggara. Contract work in this field is still valid 30 years since 2000.
Roberto said, it is still calculating the percentage of shares to be released to the public. In addition to the IPO, its subsidiary could also issue bonds in 2017.
Head of Investor Relations of Medco, Sonia Ayudiah, adding it might require the funds to repay short-term debt to three banks that provide short-term loans amounting to US$750 million. As reported earlier, MedcoEnergi AP Investment Group and work together to acquire the AMNT shares with the support of three state-owned banks, namely PT Bank Mandiri Tbk (BMRI), PT Bank Negara Indonesia Tbk (BBNI) and PT Bank Rakyat Indonesia Tbk (BBRI).
Tito explained, the three companies are among the 52 foreign firms the BEI is hoping to go IPO too and have made significant profits in Indonesia. The total capitalization of the 52 companies could reach Rp300 trillion to Rp400 trillion.
He had submitted the names of the 52 foreign companies to the finance minister so that the government would encourage them to float their shares on the Indonesian stock exchange.
In a meeting with the Coordinating Minister for Maritime Affairs Minister Luhut Binsar Panjaitan on Thursday, Tito convey the current condition of the Indonesian capital market that can be used to mobilize funds to support the development of Indonesia.
He stressed it, privatization is one way the investment will be company-owned. Unfortunately, continued Tito, there are many rules that must be followed for the management of state-owned companies could go public. He noted Act No. 19 of 2003 on state-owned enterprises, in particular Article 74 to 86 to make the process of SOEs be long for the exchange floor.
IDX is optimistic that will target 35 companies IPO in this year.Last year, only 15 listed companies achieved IPO from the initial target 23 companies.
Tido adding, beside foreign-owned companies, he has been exploring the 14 subsidiaries of State Owned Enterprises (SOEs) as the target for IPO this year.